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I've been doing a lot of research on the new home tax rebate. There is a house we want to buy, listed with a realtor - the seller who owns both the land and the house is a builder (he bought the land & built the new home). The house is priced at $399 500, and the listing says HST is included.
I have calculated out what the new home rebate should be, given that 399 500 includes HST (so the actual price of the house would be $353 ish... but when we talked to the builder he said he wants the buyers to sign over the rebate to him, and that the tax rebate is only around $8000. Not according to my calculations (I thought the max rebate for HST is 24000?).
He said that he received the tax rebate since he paid tax on everything he bought for the house (ie. counters, flooring etc.)... but to me I figured that's what HST included meant - that we would be paying for the taxes. Would we have to sign this over to him? I'm so confused!
Thanks for your help!

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I wouldn't sign over any rebate to the seller as the rebate was intended for you as the buyer. Your best bet is to negotiate the final price of the house with the seller and then, if you are happy, legally buy the house. Whatever rebate you get will be yours.

If the seller feels that he should get the $8K rebate then you should reflect that in the sale transaction (and price) not in a backroom deal.

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Would we have to sign this over to him? I'm so confused!

I think your lawyer and your realtor should be able to answer this question.

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I think your builder is referring to the "GST New Housing Rebate". Here is a page that talks about it. Here are a few salient points:

  1. New home buyers can apply for a rebate of the 5% GST ... to a maximum of $8,750 for homes costing less than $350,000 before GST.
  2. In the Greater Toronto Area (GTA), most builders include the GST in the price of the house, and any rebate would be assignable to the builder as they would be absorbing the net GST cost.

It looks as if your builder is telling something like the truth. It's not because he paid the tax on the construction materials, but because he has agreed to pay the tax on the house purchase for you. Importantly the rebate is only for the federal (GST) portion of the sales tax, which probably accounts for the 8000/24000 difference. However you should probably check with a realtor (and not the one your builder is using).

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